HF 1345

1st Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:48am

A bill for an act
relating to insurance; prohibiting certain claims processing practices by
third-party administrators of health coverage plans; regulating health claims
clearinghouses; providing a time limit on insurer audits of health claims
payments; amending Minnesota Statutes 2008, section 60A.23, subdivision 8;
proposing coding for new law in Minnesota Statutes, chapter 62Q.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 60A.23, subdivision 8, is amended to read:

Subd. 8.

Self-insurance or insurance plan administrators who are vendors
of risk management services.

(1) Scope. This subdivision applies to any vendor of
risk management services and to any entity which administers, for compensation, a
self-insurance or insurance plan. This subdivision does not apply (a) to an insurance
company authorized to transact insurance in this state, as defined by section 60A.06,
subdivision 1, clauses (4) and (5); (b) to a service plan corporation, as defined by section
62C.02, subdivision 6; (c) to a health maintenance organization, as defined by section
62D.02, subdivision 4; (d) to an employer directly operating a self-insurance plan for
its employees' benefits; (e) to an entity which administers a program of health benefits
established pursuant to a collective bargaining agreement between an employer, or group
or association of employers, and a union or unions; or (f) to an entity which administers a
self-insurance or insurance plan if a licensed Minnesota insurer is providing insurance
to the plan and if the licensed insurer has appointed the entity administering the plan as
one of its licensed agents within this state.

(2) Definitions. For purposes of this subdivision the following terms have the
meanings given them.

(a) "Administering a self-insurance or insurance plan" means (i) processing,
reviewing or paying claims, (ii) establishing or operating funds and accounts, or (iii)
otherwise providing necessary administrative services in connection with the operation of
a self-insurance or insurance plan.

(b) "Employer" means an employer, as defined by section 62E.02, subdivision 2.

(c) "Entity" means any association, corporation, partnership, sole proprietorship,
trust, or other business entity engaged in or transacting business in this state.

(d) "Self-insurance or insurance plan" means a plan providing life, medical or
hospital care, accident, sickness or disability insurance for the benefit of employees or
members of an association, or a plan providing liability coverage for any other risk or
hazard, which is or is not directly insured or provided by a licensed insurer, service plan
corporation, or health maintenance organization.

(e) "Vendor of risk management services" means an entity providing for
compensation actuarial, financial management, accounting, legal or other services for the
purpose of designing and establishing a self-insurance or insurance plan for an employer.

(3) License. No vendor of risk management services or entity administering a
self-insurance or insurance plan may transact this business in this state unless it is licensed
to do so by the commissioner. An applicant for a license shall state in writing the type of
activities it seeks authorization to engage in and the type of services it seeks authorization
to provide. The license may be granted only when the commissioner is satisfied that the
entity possesses the necessary organization, background, expertise, and financial integrity
to supply the services sought to be offered. The commissioner may issue a license subject
to restrictions or limitations upon the authorization, including the type of services which
may be supplied or the activities which may be engaged in. The license fee is $1,500
for the initial application and $1,500 for each three-year renewal. All licenses are for
a period of three years.

(4) Regulatory restrictions; powers of the commissioner. To assure that
self-insurance or insurance plans are financially solvent, are administered in a fair and
equitable fashion, and are processing claims and paying benefits in a prompt, fair,
and honest manner, vendors of risk management services and entities administering
insurance or self-insurance plans are subject to the supervision and examination by the
commissioner. Vendors of risk management services, entities administering insurance or
self-insurance plans, and insurance or self-insurance plans established or operated by
them are subject to the trade practice requirements of sections 72A.19 to 72A.30. In lieu
of an unlimited guarantee from a parent corporation for a vendor of risk management
services or an entity administering insurance or self-insurance plans, the commissioner
may accept a surety bond in a form satisfactory to the commissioner in an amount equal to
120 percent of the total amount of claims handled by the applicant in the prior year. If at
any time the total amount of claims handled during a year exceeds the amount upon which
the bond was calculated, the administrator shall immediately notify the commissioner.
The commissioner may require that the bond be increased accordingly.

No contract entered into after July 1, 2001, between a licensed vendor of risk
management services and a group authorized to self-insure for workers' compensation
liabilities under section 79A.03, subdivision 6, may take effect until it has been filed
with the commissioner, and either (1) the commissioner has approved it or (2) 60 days
have elapsed and the commissioner has not disapproved it as misleading or violative of
public policy.

(5) Rulemaking authority. To carry out the purposes of this subdivision, the
commissioner may adopt rules pursuant to sections 14.001 to 14.69. These rules may:

(a) establish reporting requirements for administrators of insurance or self-insurance
plans;

(b) establish standards and guidelines to assure the adequacy of financing, reinsuring,
and administration of insurance or self-insurance plans;

(c) establish bonding requirements or other provisions assuring the financial integrity
of entities administering insurance or self-insurance plans; or

(d) establish other reasonable requirements to further the purposes of this
subdivision.

new text begin (6) Claims processing practices. No entity administering a self-insurance or
insurance plan shall:
new text end

new text begin (a) require a patient to pay for care provided by an in-network provider an amount
that exceeds the fee negotiated between the entity and that provider for the type of care
provided;
new text end

new text begin (b) attempt to recoup from the provider a payment owed to the provider by the
patient for deductibles, co-pays, coinsurance, or other enrollee cost-sharing required under
the plan, unless the administrator has confirmed with the provider that the patient has
paid the cost-sharing amounts in full; or
new text end

new text begin (c) limit the time period to submit a claim, which may not be less than 90 days
through contract or statute, unless the health care provider knew or was informed of
the correct name and address of the responsible health plan company or third-party
administrator.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2009, and applies to
patient care provided on or after that date.
new text end

Sec. 2.

new text begin [62Q.7375] HEALTH CARE CLEARINGHOUSES.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For the purposes of this section, "health care
clearinghouse" or "clearinghouse" means a public or private entity, including a billing
service, repricing company, community health management information system or
community health information system, and "value-added" networks and switches, that
does either of the following functions:
new text end

new text begin (1) processes or facilitates the processing of health information received from
another entity in a nonstandard format or containing nonstandard data content into
standard data elements or a standard transaction; or
new text end

new text begin (2) receives a standard transaction from another entity and processes or facilitates
the processing of health information into nonstandard format or nonstandard data content
for the receiving entity.
new text end

new text begin Subd. 2. new text end

new text begin Claims submission deadlines and careful handling. new text end

new text begin (a) A health plan or
third-party administrator must not have or enforce a deadline for submission of claims
that is shorter than the period provided in section 60A.23, subdivision 8, paragraph (6),
clause (c).
new text end

new text begin (b) A claim submitted to a health plan or third-party administrator through a health
care clearinghouse or clearinghouse within the time permitted under paragraph (a) must be
treated as timely by the health plan or third-party administrator. This paragraph does not
apply if the provider submitted the claim to a clearinghouse that does not have the ability
or authority to transmit the claim to the relevant health plan company.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2009, and applies to claims
transmitted to a clearinghouse on or after that date.
new text end

Sec. 3.

new text begin [62Q.748] HEALTH CLAIMS PAYMENT AUDITS; TIME LIMIT.
new text end

new text begin (a) No health plan company providing health coverage in this state shall initiate an
audit to recover a paid claim on the basis that the claim was paid for a service that was
not medically necessary treatment at a time that is more than six months after the claim
was paid.
new text end

new text begin (b) No health plan company providing health coverage in this state shall withhold
payment on current claims during the pendency of an audit described in paragraph (a)
unless the audit dispute has reached final adjudication.
new text end

new text begin (c) This section does not apply to an investigation based on a reasonable belief of
suspected insurance fraud under sections 60A.951 to 60A.956 by an authorized person as
defined in section 60A.951, subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2009, and applies to claims
paid before, on, or after that date.
new text end